Bullverines 2 week trial Journal and PA discussion

Day 7 (Please see the attached chart):

Today was a fairly good play on news. My stock on choice was MON and it gaped down at the open. I bought it on the way up and exited too soon in a desire to preserve the gain, it was not a rational exit and I should have waited until the gap closed or sold half. Missed the first opportunity to sell after the gap was closed and run up was over, but was able to short on the next reversal (LH) and locked in another good move my moving my stop above each newly formed LH. Overall I am please with the way this trade went.
 

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Day 8 (please see the attached chart):

Well BBY has been screwing with me the entire day. First we get a small down gap at the open followed by a nice run up. I miss the initial move and around 10:30 start thinking "well why don't I join this nice slow up trend?", but wait BBY is approaching its 4 month resistance(44.85) that was set during the positive earning report end of march. So I change my plan to short a nice bounce of resistance, but it never came and I got taken out by retest. Also to add insult to injury I confused early small reversal with a double top. At the end of the day all of this mistakes produced a small loss because all my stops were in place, but still very annoying considering that I had multiple chances to get it right. I think I should curb my enthusiasm, I expect to much out of long term resistance and should not act just based on the fact that the price got there again.
 

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Quote from Bullverine:

Day 8 (please see the attached chart):

Well BBY has been screwing with me the entire day. First we get a small down gap at the open followed by a nice run up. I miss the initial move and around 10:30 start thinking "well why don't I join this nice slow up trend?", but wait BBY is approaching its 4 month resistance(44.85) that was set during the positive earning report end of march. So I change my plan to short a nice bounce of resistance, but it never came and I got taken out by retest. Also to add insult to injury I confused early small reversal with a double top. At the end of the day all of this mistakes produced a small loss because all my stops were in place, but still very annoying considering that I had multiple chances to get it right. I think I should curb my enthusiasm, I expect to much out of long term resistance and should not act just based on the fact that the price got there again.
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The setups look good to me too. It's one of those days where retail was just too strong to provide a decent retrace of the move.
 
Quote from NoDoji:

The setups look good to me too. It's one of those days where retail was just too strong to provide a decent retrace of the move.
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I am glad to hear you see it too. I thought lack of screentime is making me see set ups that are not there :))
 
Day 9 (please see the attached chart):

Was trading WYNN today. As you can see from the chart I got an interesting lesson in resistances and breakouts.The stock is trading at its highest point in over a year, so there is no resistance to speak of its all a new "frontier". At first I caught a small move up and then I was able to short right at the top. The problem is that top never really went down, the stock got stock in the range, then broke through to the up side and at that point I reversed my position and went long thinking that a breakthrough would be followed by a nice move up, but it never came :(( This stock turned out to be range bound and was a waste of time and money.


I am not sure what my lesson from today's action is.... could someone please help me to figure out what went wrong?
 

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Quote from Bullverine:



I am not sure what my lesson from today's action is.... could someone please help me to figure out what went wrong?
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you didnt do anything wrong (except reverse your position.). The trade ddint work out in your favor.. You kept it a small loss, and move on.
Whenever I did that I always added insult to injury.
It was a smart play initially, but those dont always work. thats why r/w ratios keep you in the game. I wouldnt try to reverse your position. you will get chopped up.

(also. look where you shorted in relation to previous day S/R. I didnt check the(overall daily) chart, but you shorted at a potentially dangerous point. if there was longer term daily S/R, you could have been in trouble.
 
I agree, nothing wrong with what you did. WYNN is a nice momentum stock even when it's already made a very large run as you can see from the opening hour's action (more than a 2 pt range down and up).

Trading AAPL, AMZN and POT, I found that the opening 90 mins provided the best moves and I started using a 1-min chart to catch an early entry, hoping to possibly catch a good trend or at least one of the stronger moves of the day. I generally avoid the first 5 mins' noise (unless a signal is simply too good to pass up).

So if I were looking for an early entry with WYNN Friday, I study multiple time frames first. I see on the daily chart that it tends to have a very strong up day, then pull back for 1-3 days. The pullback is never a full retracement of the up move, in fact lately it's been less than 50% retracement. I also note that short interest is high, and it just closed at a 52-week high on a very strong up day. None of the investors are in any pain at all, and have no reason to sell. Short term traders may be looking to take at least partial profits if price breaks down Thursday's close (86.23).

So my trading plan for early entry would be to short any selling pressure off the open, meaning if price didn't go up right away, I'd be short immediately.

My trading plan for conservative entry would be to short a tick or two below 86.23.

My initial profit target would be at a price greater than 50% retracement of the last move up and my stop no greater than Thursday's high (86.91). If you go with a 40% retracement (approx 2.50) your target off Thursday's high will be 84.41. Once price moves 40-50 ticks in your favor, move the stop to break even. You're counter-trend trading so give the play no mercy stop-wise.

Price opens gapped up slightly, but falls right away and the short entry is triggered. Looking at the chart, I can tell you right now that I personally would have covered when price found support near the round number 85.00. Even if I gave the trade more time, I would've ended up covering around the same price, when price left a long hammer behind on the 9:51am bar (3-min chart, which I use for stock trading).

That hammer was a decent enough long signal, but knowing me I'd still have too much short bias to go long. That's still a big defect of mine, forming opinions instead of responding automatically to the price action signals.
 
mdl,

When I shorted there was no longer term S/R, the stock is trading at 52-week high. I find this situations tricky because there is not good point of reference. Why in your experience its dangerous to reverse a position if you realize that you are on the wrong side of the trade that you want to be a "part of" ?



NoD,

Thank you for the detailed analysis. May I ask you about the 40-50% retracement, is this just an arbitrary range that the stock retraces due to quick profit taking from previous run?

Also, you mentioned that you would use a 86.91 stop. Since this is a counter-trend trade and you are being merciless with you stops, shouldn't the stop be right above the entry because if the trade moves in the wrong direction you initial hypothesis has been proven wrong and there is no reason to give it elbow room?
 
Quote from Bullverine:

NoD,

Thank you for the detailed analysis. May I ask you about the 40-50% retracement, is this just an arbitrary range that the stock retraces due to quick profit taking from previous run?

Also, you mentioned that you would use a 86.91 stop. Since this is a counter-trend trade and you are being merciless with you stops, shouldn't the stop be right above the entry because if the trade moves in the wrong direction you initial hypothesis has been proven wrong and there is no reason to give it elbow room?
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"No greater than" 86.91. I personally would've likely had a tighter stop.

When counter-trend trading, you look to take profits at the 20-bar MA or if playing a retrace pattern, you want less than 50% because in a strong trend you rarely get to 50%.
 
I just wanted to say thank you to those few that have been following my brief journal and those that left their comments. I am briefly suspending the journal updates since I had to go back to my day job. After this few weeks I can with certainly say that I got the "hunger". I will defiantly pursue this path. For now and will stick with my current day job for a few month more till I do a bit more research and analysis and then its ON full time :))
 
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